More

VisitDallas leaders appoint interim CEO, but say starting over 'would be a disaster'

The announcement of Sam Coats' appointment as interim CEO came a day after Phillip Jones, VisitDallas' longtime CEO and president, stepped down.

Sam Coats, new interim CEO of VisitDallas, spoke during a news conference at the VisitDallas offices Thursday. With him were Joyce Williams, the incoming board chair, and Mark Woeffler, the Sheraton Dallas general manager who is currently board chair.(Rose Baca / Staff Photographer)

Businessman Sam Coats, a recent DFW International Airport Board chairman and one-time mayoral candidate, took the helm Thursday of VisitDallas, the beleaguered city convention and visitors bureau.

The announcement came a day after the board chairman said Phillip Jones, VisitDallas' longtime CEO and president, had stepped down. Jones was on the hot seat after a City Hall audit challenged the way the organization spent and handled its tens of millions in taxpayer dollars, questioned the CEO's compensation and expenses and criticized how the city kept tabs on the organization.

Jones, who had four years left on his contract that paid him almost $700,000 annually, will leave with a $600,000 severance, VisitDallas Board Chairman Mark Woelffer said Thursday. Woelffer said Jones "did no wrong, and the separation was mutual."

VisitDallas Chief Financial Officer Matthew Jones, whose abrupt departure was made public Wednesday during a Dallas Morning News interview with Mayor Mike Rawlings, will not receive a severance.

Woelffer said the departures of Matthew Jones and Phillip Jones were not connected. (The men are not related). VisitDallas has not announced who will replace Matthew Jones.

Despite the Joneses' departures and furor over the audit, VisitDallas leaders insist the city needs to stick with them as they overhaul the way the organization is run.

Coats, 78, who served as a board chairman of VisitDallas when it was called the Dallas Convention and Visitors Bureau, is expected to serve until the board finds a permanent replacement for Phillip Jones. And that could take a while.

Coats, who ran for mayor in 2007, finishing sixth in a field of 11 candidates, said Thursday he has three immediate priorities: finding a new CFO, renewing VisitDallas' contract with the city and hiring a full-time CEO. Coats said it's important to get the contract nailed down before the board looks for his replacement.

"There needs to be certainty," Coats said.

mobile-only dfpPosition1

But that contract doesn't expire until September 2020.

Phillip Jones, who was president and CEO of VisitDallas, defended himself on Jan. 9 after Dallas City Hall released an audit highly critical of the organization and its leadership.(Ryan Michalesko / Staff Photographer)

And depending on who becomes Dallas mayor next month, that's far from inevitable.

North Oak Cliff's City Council member Scott Griggs, who's in the June runoff with state Rep. Eric Johnson, has said repeatedly that he wants the contract put out for a bid — what's called a request for proposals, or an RFP. Griggs also wants some of VisitDallas' hotel-tax revenue redirected toward the arts. VisitDallas executives gave tens of thousands to a political action committee that donated money to mayoral candidates.

Coats said he wants to get that contract renewed well before its expiration date.

Woelffer, who is general manager at Sheraton Dallas, rejected the idea that the city could find another organization to replicate what VisitDallas does, insisting that a request for proposals "would be a disaster" for the hotel industry.

"Without VisitDallas," said the hotel manager, "the hotel community will not survive."

Rawlings said Thursday he doesn't agree with "some people who say the way to fix thing is to blow things up."

mobile-only dfpPosition2

"They have no experience in management," Rawlings said. "You push and you change and you always improve it. That's how you get to excellence, not by blowing things up. ... Shame on them for even thinking about that."

But in February, Chris Luna, a former board chair for the Dallas Convention and Visitors Bureau who also served on the City Council, said the city should consider a request for proposals or turn VisitDallas' operations over to Spectra. And, in an opinion piece in The News, Luna even suggested bringing the convention and visitors bureau into Dallas City Hall "to market and sell Dallas as the ideal visitor and convention destination, using the funds that currently go to VisitDallas."

And those funds are substantial.

Sam Coats, new interim CEO of VisitDallas, spoke during a news conference at the VisitDallas offices Thursday. With him were Joyce Williams, the incoming board chair, and Mark Woeffler, the Sheraton Dallas general manager who is currently board chair.(Rose Baca / Staff Photographer)

VisitDallas's annual budget includes $30 million received from the city each year. About $16 million of that is drawn from the hotel occupancy tax, which is set at 7% of a room's cost on top of the 6% charged and collected by the state. The other $14 million or so comes from the Tourism Public Improvement District, a 2% assessment on all Dallas hotels with more than 100 rooms.

The audit found that VisitDallas had commingled the two revenue sources, an apparent violation of state law.

At a news conference held days after the audit's release, Matthew Jones said that wasn't correct. But Carol Smith, at the time serving as Dallas' interim auditor, said she stood by the audit. That included findings that VisitDallas relied on vague metrics to measure its success; was often delinquent when paying its $500,000 annual contribution to the convention center's upkeep; and allowed Phillip Jones to expense personal items despite his $700,000 annual salary.

"The report issued was shared with VisitDallas," Smith said during a Jan. 9 interview with The News, "and opportunities were provided for them to refute the report by providing additional facts. None were provided on that specific point."

Rawlings said Wednesday that he wanted major changes to VisitDallas even before the audit. And on Thursday it became even clearer that changes were in the works long before Wednesday's announcement.

mobile-only dfpPosition3

Coats said he was approached about the interim CEO position around April 12 or 13, when he received a phone call from lawyer Peg Hall, who Coats knew from his days serving as president of the North Dallas Chamber. Coats said Thursday that his wife wasn't thrilled, but he ultimately agreed to take the job because "I love the city." Nevertheless, Coats said, he hopes to serve "as short a period as possible" before turning over the job to someone else.

Rawlings, who has but a month left in office, said the council will discuss next week how the city can make sure VisitDallas is living up to terms of its contract — a critical piece of the audit.

The mayor said, too, he wants to see VisitDallas' 52-member board reduced sharply. The mayor, a former board member, said several times this week that the board — which includes hoteliers, restaurateurs, Arts District officials and others — was too big to get anything done. The mayor said it also makes transparency difficult, even with two council members — Jennifer Staubach Gates, its co-chair, and Adam Medrano — at the table.

Dallas Mayor Mike Rawlings, speaking at the VisitDallas news conference Thursday, said he has wanted a change in leadership there for quite some time. (Rose Baca / Staff Photographer)

Coats, too, believes the board is too unwieldy and needs to be down to about 11 or 13 members.

VisitDallas leadership said Thursday that within six months it expects to put forward a proposal that will whittle the board to something far more manageable.

Coats has sat on numerous boards during his lengthy business career, which includes stints as an executive for airlines including Compass, Southwest, Braniff and Continental. He was also CEO of sandwich shop Schlotzsky's.

In 2006, he assisted negotiations over the phase-out of the Wright Amendment, which gave Southwest Airlines and Love Field a major boost. Rawlings also served with Coats on the DFW International Airport board.

Coats, who served as a state representative from 1971 to 1973, said he wasn't brought in to rebuild VisitDallas and doesn't believe the organization to be "broken." He has also yet to read the audit but plans to do so this weekend.